Last Chance at the Pension Bonus Scheme
Your last chance to register to claim the Pension Bonus is fast approaching. In fact, you only have until the end of the month (28 February 2014) to register.
What is the Pension Bonus Scheme?
The Pension Bonus Scheme (PBS) is a scheme to encourage older Australians to remain in the workforce beyond their pension age. When claiming the bonus, you defer taking the Age Pension and instead accrue a tax-free bonus that can be claimed upon retiring, providing eligibility criteria is met.
The scheme was cut in 2009 but it remains open for late registrations.
Who is still eligible to apply for the PBS?
To be eligible for the PBS, you:
- reached Age Pension age before 20 September 2009, that’s men born before 20 September 1944 and women born before 1 January 1946
- are working and have worked since reaching Age Pension age for an average of 20 hours per week for 48 weeks each year
- have not yet claimed the Age Pension
How do I apply for the PBS?
You need to act quickly to beat the February 28 deadline. The first step is to lodge a registration form through Centrelink. Your bonus only starts to accrue once registration is completed.
You can apply to Centrelink to have your registration date backdated to when you first reached Age Pension age.
Being genuinely unaware that the scheme existed, should be a sufficient reason to have your registration date backdated. A letter explaining your situation is typically all that is required.
How much, and when, is the money paid from the PBS?
The maximum bonus payable for a single pensioner is around $47,000 or $35,000 for a member of a couple.
You don’t actually claim your bonus until you stop working and apply for the Age Pension. At this point, there is a section to complete on the Age Pension application form.
You only have 13 weeks after you finish up at work (when you cease to meet the ‘work test’) to claim the pension bonus.
Are there any ways I can maximise the amount I get paid from Pension Bonus?
Yes. The amount of Pension Bonus you get paid is based on how long you have been registered and how much Age Pension you are entitled to. So, any method enabling you to increase your Age Pension entitlement, will also increase your bonus.
For helpful hints on ways to increase your pension, please see related post, How to increase your pension.
What has replaced the PBS?
The Work Bonus is a new scheme which allows you to earn up to $250 per fortnight from employment without affecting your Age Pension. There’s no need to apply for the Work Bonus, Centrelink will automatically allow for it in their assessment of your pension when you advise them of your work earnings.
Wally David, CFP®
Financial Planning Matters
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